‘I’m 38 and don’t have a pension – should I invest now or is it too risky?’

'It feels like my generation has not had the opportunity to have an end-of-service, lifetime pension, even if you work in a full-time job for your whole life'

Lizzie Frances, 38, does not have a pension. i asks Alice Haine, an adviser at Bestinvest, to suggest what she should do:

“I was employed in Dubai for a while between 2008 and 2009, then again from 2012 to 2015. Since returning I have mostly been working freelance in the UK but not in any roles that gave me a pension.

“When I came back from Dubai, I was saving up for a property so everything went into that really.

“I took out £4,000 to put into a self-invested pension (Sipp) this year but I haven’t invested it yet. I haven’t done anything with it because it doesn’t feel like a priority now. I basically have no pension.

“A pension is something I want to do but won’t be able to until my mortgage is under control. Until recently, I would have said that property felt safer than any other asset. I don’t like that with a private pension you basically have to gamble your future on stocks and shares. The past week has shown just how risky that is.

“It feels like my generation has not had the opportunity to have an end-of-service, lifetime pension, even if you work in a full-time job for your whole life.

“Ideally I’d like to put my Sipp into a green energy company, but it still feels like a gamble, particularly with how the Government are treating the green energy transition. There are so many unknowns at the moment, with the ongoing war in Ukraine, and our own government making rash financial decisions during turbulent economic times.

“I have no idea what will happen in two years which makes any investment feel more risky.”

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What should Lizzie do?

Alice Haine, an adviser at Bestinvest: What Brits living in Dubai gain with the weather, they often lose out on pension saving. This is because overseas residents cannot gain from the tax reliefs extended to UK residents on their pension contributions, and they do not accrue any years towards their state pension allowance either.

At 38, you are far from a lost cause, as you potentially have almost 30 years to contribute. You appear nervous about investing in the markets, but a pension is a long-term investment. The really good news is that investing your money after the steep decline in the markets, as we have seen recently, is usually a great time to start.

Aim to drip-feed the money into your chosen investments slowly to smooth out the ups and downs of the markets. While your green investment strategy is admirable, picking a single green energy company is risky. It would be much wiser to invest in a diversified fund,

If you want to stick with the green approach, then the FP WHEB Sustainability fund is worth considering.

Considering your age, you could even be a little bolder and go for the GuardCap Global Equity fund. This invests in larger firms which the managers believe will produce sustained long-term growth.

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